Is the False Claims Act’s first-to-file rule jurisdictional? While circuit courts are split on the issue, the majority agree that it is not. Just last month, the Ninth Circuit joined that majority in a case called Stein v. Kaiser Foundation Health Plan, Inc., overruling two decades’ worth of its prior cases in the process.

The FCA permits private parties—known as “relators”—to initiate actions on behalf of the United States against parties that knowingly submitted false claims to the federal government. If an action is successful, the relator is entitled to a share of the proceeds recovered. But being slow to sue can be costly. Under the first-to-file rule, codified at 31 U.S.C.A. § 3730(b)(5), “[w]hen a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”

In Stein, the Ninth Circuit addressed whether this rule is jurisdictional. The distinction between jurisdictional and non-jurisdictional rules has significant implications. First, a jurisdictional defect can be challenged at any time (even on appeal) by counsel or the court, whereas a challenge to a non-jurisdictional defect is waived if not raised by the defendant in a 12(b)(6) motion. Second, the plaintiff bears the burden of establishing jurisdiction, whereas the defendant bears the burden of proving that a complaint fails to state a claim. And third, the court may consider evidence beyond the complaint to resolve a jurisdictional inquiry, whereas it is typically limited to considering the allegations pled when conducting a 12(b)(6) analysis.

The Ninth Circuit held that the FCA’s first-to-file rule is not jurisdictional, overruling its prior decisions and characterizing them as lacking “any analysis” on the issue. The court reached its conclusion by applying the Supreme Court’s recent instruction that a rule is jurisdictional “only if Congress clearly states that it is.” The Ninth Circuit found no language or “textual clue” in Section 3730(b)(5) suggesting that the rule is jurisdictional. In contrast, the court recognized that Sections 3730(e) and 3732 of the FCA expressly use jurisdictional language. Invoking the interpretive canon that Congress is generally presumed to act intentionally when it uses language in one section of a statute but not another, the Ninth Circuit reasoned that Congress’ decision to include jurisdictional language in those sections but not Section 3730(b)(5) supported interpreting the first-to-file rule as non-jurisdictional.

Before Stein was decided, the circuits were split 5-4 on whether the first-to-file rule is jurisdictional, with the First, Second, Third, Sixth, and D.C. Circuits ruling it is not, and the Fourth, Fifth, Ninth, and Tenth Circuits holding the opposite. Now that the Ninth Circuit has defected from the minority, the split is 6-3.

Stein provides relators in the Seventh, Eighth, and Eleventh Circuits (which have not yet weighed in on the issue) with additional persuasive authority to argue that the first-to-file rule is not jurisdictional. But it is also a reminder that courts in the minority of the split can, and have, changed their minds as the Supreme Court’s jurisprudence has evolved. In fact, the First and Sixth Circuits—which, like the Ninth Circuit, formerly held the first-to-file rule is jurisdictional—also reversed course after applying the Supreme Court’s clear-statement rule. Among the current minority, the Tenth Circuit may be particularly amenable to reconsidering its precedent, given that it relied solely on one of the Ninth Circuit’s now-overturned cases in holding that the first-to-file rule is jurisdictional.

The Ninth Circuit’s decision can be viewed here.